B.C. Forests MInister Doug Donaldson (right side centre) meets with housing ministry officials in Jiangsu province, China, Nov. 15, 2017. The complexities of Asia trade and continued attacks from U.S. lumber producers have spurred B.C. to open a network of Asia trade offices. (B.C. government photo)

Donald Trump’s trade wars hit B.C.’s struggling forest industry

World Trade Organization can’t rule on softwood lumber tariffs

The U.S. government and industry’s trade attack on B.C.’s lumber industry is now nearly four decades old, and prospects are dim that the current round of punitive duties may be overruled by the World Trade Organization.

Even as Canada, the U.S. and Mexico celebrate an updated North American free trade deal, it still doesn’t include softwood lumber. And one of U.S. President Donald Trump’s tactics has been to block the appointment of WTO appeal judges, leaving the appeal panel without a quorum to review the current heavy border tariffs on Canadian lumber as the current terms expired at the end of 2019.

Trump and U.S. Trade Representative Robert Lighthizer have rejected the WTO’s dispute settlement system as unfair to the U.S. Lighthizer told the U.S. Senate finance committee in March 2019 that blocking appointments is the only way he has to force reforms to the WTO, as the Trump administration works toward trade deals with China and its North American partners.

RELATED: Canada signs new NAFTA deal with U.S., Mexico

RELATED: Laid-off forest workers descend on B.C. legislature

RELATED: B.C. to ‘embed’ Asia trade offices in Canadian embassies

The duties continue to be applied as North American lumber prices have slumped over the past year, and market conditions and cutting restrictions have led to a wave of shutdowns across the B.C. forest industry.

B.C. Forests Minister Doug Donaldson recently returned from the latest industry trade mission to Asia, where Chinese demand is also in decline after a peak in 2013 that saw it briefly overtake the U.S. as the top customer for B.C. lumber in B.C.

B.C. continues its efforts to market timber and wood construction across Asia, where Japan is its longest-standing customer and some gains have been seen in Korea, India, Singapore and Malaysia. B.C.’s network of trade offices, which has focused heavily on forest products to reduce dependency on the U.S. market, have been ordered closed, with staff transferred to Canadian embassies and consulates in the region.

As 2020 dawns, the province has also drastically reduced its stumpage rate for Crown timber, after B.C. producers protested that the system wasn’t responding fast enough to the 2019 decline in prices. Provincial stumpage fees for cutting coastal Crown land timber ard reduced to $8.82 per cubic metre as of Jan. 1, in the latest quarterly adjustment. Stumpage reached a high of $18.73 in January 2019.

The WTO has ruled in Canada’s favour in previous rounds, on U.S. claims that buying Crown-owned timber represents an unfair subsidy to Canadian construction materials. The first round was in 1982, and the fifth remains in place at the start of 2020, with the U.S. Department of Commerce imposing countervailing and “anti-dumping” duties across Canada.

The heaviest import duties fall on B.C.-based companies, with West Fraser facing a total of more than 23 per cent. Tolko is penalized 22 per cent and Canfor duties total more than 20 per cent, combining countervailing and anti-dumping penalties.

Quebec-based Resolute is being assessed a roughly 18 per cent duty, and New Brunswick-based Irving is paying just under 10 per cent, based on the U.S. assessment of their log costs.

On the B.C. coast, Mosaic Forest Management laid off about 2,000 union and non-union employees as well as coastal logging contractors at the end of November, beginning its seasonal shutdown early due to what the company termed “very challenging pricing and market conditions.” Mosaic is a partnership of Island Timberlands and Timberwest, which along with Western Forest Products represents most of the lumber industry on Vancouver Island and the adjacent coast.

Western has been shut down for six months by striking United Steelworkers members, forcing logging contractors off the job. Premier John Horgan has promised aid for contractors, who are losing their homes and equipment.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Port Alberni firefighters raise $500 for Burn Camp

To date, Port Alberni has raised $13,000 for the BC Professional Fire Fighters’ Burn Fund

Port Alberni residents fighting with BC Ferries

Medically assured loading aboard ferries welcomed by Islanders

Canal Beach in Port Alberni open for swimming

Beach had been closed in July after high bacteria readings were detected in the water

North Island College offers resources for students learning online

College will hold a ‘virtual orientation’ this week

QUIZ: How much do you know about British Columbia?

On this B.C. Day long weekend, put your knowledge of our province to the test

B.C. records 146 new COVID-19 cases through long weekend

More that 28 people tested positive for the virus each day since Friday

Alberta to require masks at schools this fall, but still no mandate in B.C.

B.C. students are also set to return to classrooms in September

B.C. to allow customers to buy cannabis online for in-store pickup at private shops

Age verification will still be required inside the store

30% of British Columbians would ‘wait and see’ before taking COVID vaccine: poll

Some are concerned about side effects, while others don’t think the virus is a big deal

Don’t leave your hand sanitizer in the sun and other tips to stay COVID safe this summer

Being mindful of staying outside and keeping hand sanitizer, sunscreen out of the sun recommended

What exactly is ‘old growth’ B.C. forest, and how much is protected?

Forests minister Doug Donaldson doesn’t support ‘moratorium’

Canadians can travel to Hawaii in September; no quarantine with negative COVID test

Travellers will be required to pay for their own tests prior to arriving

Pay cuts, seating charts, COVID screening: How one B.C. venue is bringing back concerts

A growing number of bars and restaurants are welcoming back musicians under COVID-19 precautions

Most Read